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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
Thermo Fisher Scientific Inc has a M-score of -2.64 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -1.12. The lowest was -2.88. And the median was -2.51.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 1.0284||+||0.528 * 1.0022||+||0.404 * 0.8338||+||0.892 * 1.0464||+||0.115 * 1.0046|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9817||+||4.679 * -0.0214||-||0.327 * 1.1918|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $1,942 Mil.|
Revenue was 3466.9 + 3191.8 + 3240.1 + 3191.5 = $13,090 Mil.
Gross Profit was 1481.7 + 1347.9 + 1363.2 + 1336.3 = $5,529 Mil.
Total Current Assets was $9,881 Mil.
Total Assets was $31,863 Mil.
Property, Plant and Equipment(Net PPE) was $1,767 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,000 Mil.
Selling, General & Admin. Expense(SGA) was $3,446 Mil.
Total Current Liabilities was $3,126 Mil.
Long-Term Debt was $9,500 Mil.
Net Income was 342.1 + 317.6 + 277.4 + 336.2 = $1,273 Mil.
Non Operating Income was -15 + -15.9 + -38.1 + 13 = $-56 Mil.
Cash Flow from Operations was 728.5 + 505.5 + 478.4 + 298.3 = $2,011 Mil.
|Accounts Receivable was $1,805 Mil.
Revenue was 3259.3 + 3085.7 + 3108.1 + 3056.8 = $12,510 Mil.
Gross Profit was 1386.1 + 1298.4 + 1321.3 + 1289.7 = $5,296 Mil.
Total Current Assets was $4,835 Mil.
Total Assets was $27,445 Mil.
Property, Plant and Equipment(Net PPE) was $1,726 Mil.
Depreciation, Depletion and Amortization(DDA) was $984 Mil.
Selling, General & Admin. Expense(SGA) was $3,355 Mil.
Total Current Liabilities was $2,093 Mil.
Long-Term Debt was $7,031 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1942.3 / 13090.3)||/||(1804.9 / 12509.9)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1347.9 / 12509.9)||/||(1481.7 / 13090.3)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (9880.7 + 1767.4) / 31863.4)||/||(1 - (4834.8 + 1726.4) / 27444.6)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(983.7 / (983.7 + 1726.4))||/||(999.9 / (999.9 + 1767.4))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(3446.3 / 13090.3)||/||(3354.9 / 12509.9)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((9499.6 + 3126) / 31863.4)||/||((7031.2 + 2093.3) / 27444.6)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1273.3 - -56||-||2010.7)||/||31863.4|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Thermo Fisher Scientific Inc has a M-score of -2.64 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Thermo Fisher Scientific Inc Annual Data
Thermo Fisher Scientific Inc Quarterly Data